Justified P/B conclusion, regarding, different, exercises

CFA4Techie

Hi guys,

I have a concern regarding the formula to use for the Justified P/B:

- In the CFAI theory, it gives: (ROE-g)/(r-g) Book4 p.512
- In Secret Sauce, same formula...
- But in the solution of the exercises, it gives: (solutions are on p.629)
P/B = 1+ ((ROE-g)/(r-g))

Where is the problem? Is the answer to the solution correct? Unfortunately the conclusion to the question is totally different due to this +1 added...

Thanks for your help! And good luck with further studies!!



Paul